Video streaming device maker Roku files for $100M IPO

People streamed 9.5 billion hours of video on Roku players last year, as compared to less than billion hours in 2012. It had 15.1 million active accounts as of June 30ETtech | September 02, 2017, 11:25 IST

Video streaming device maker Roku has filed for an initial public offering on Friday, as the company looks to cash in on the booming demand for video services and fend off competitive threats from bigger technology companies.

The company is looking to raise up to $100 million, although the final size is likely to change after its investment bankers gauge the demand for the stock offering.

It will list on Nasdaq under the ticker symbol "ROKU". Roku is yet to disclose the number of shares that will be offered through this offering and their price range.

The company had 15.1 million active accounts as of June 30, as per the IPO filing. This number however doesn't reflect the total audience that watches online video through its streaming players, which are usually connected to large-screen televisions, since multiple players can belong to the same account.

People streamed 9.5 billion hours of video on Roku players last year, as compared to less than billion hours in 2012.

Roku is however still unprofitable. Last year, it lost nearly $43 million on $399 million in revenue. Since its 2002 inception, Roku has amassed $244 million in losses.

Roku generates most of its revenue from selling its streaming players, but it's increasingly bringing in money from advertising and commissions from subscriptions and other transactions made on its devices.

In an attempt to broaden its audience, Roku said it may cut the prices on its players and try to increase its revenue from advertising sales. This is probably one of the reasons that Roku is going public now. The company currently has about $70 million in cash.

Roku has emerged as the market leader in streaming players in the US market, with a 37% share during the first three months of this year, according to the market research firm Park Associates. Amazon Fire TV ranked second with a 24% market share, followed by Google's Chromecast at 18% and Apple TV at 15%.

Most of Roku is currently owned by VC firm Menlo Ventures and Roku founder & CEO Anthony Wood. Menlo Ventures has a 35.3% stake while Wood owns a 28% stake in Roku.

Other investors in the company include Fidelity (12.9% stake), Twenty-First Century Fox (7% stake) and Globespan Capital Partners (6.1% stake).